U.S. Crypto Tax Basics: Taxable Disposals, Income, and Recordkeeping
Summary
The guide explains the U.S. tax treatment of cryptocurrency as property and distinguishes taxable disposals from simply buying or holding crypto. Selling for dollars, swapping one token for another, and spending crypto can realize a capital gain or loss. The gain or loss is based on the asset’s cost basis and value when disposed of, with holding period determining whether capital gains are short- or long-term.
It separately describes crypto received through staking, airdrops, rewards, or employment as income measured at fair market value when received. The document emphasizes tracking transaction values and cost basis, and suggests tax software to organize records and calculate results. It also says losses may offset gains and, in some cases, income.
The examples and explanations are introductory rather than comprehensive tax advice. Tax treatment can depend on the facts and may change; the guide does not address specialized situations or substantiate its claims about enforcement and exchange reporting. It recommends consulting a qualified tax professional.
Key ideas
- U.S. tax rules generally treat cryptocurrency as property rather than currency.
- Selling, swapping, or spending crypto may realize a capital gain or loss, while buying or holding alone does not.
- The gain or loss depends on cost basis and value at disposal, and the holding period affects the tax rate.
- Crypto received as rewards, airdrops, staking proceeds, or pay may be taxable income at receipt.
- Detailed transaction records support cost basis calculations and tax reporting.
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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.